Why Solana could still reach $200 despite waning momentum
The post Why Solana could still reach $200 despite waning momentum appeared on BitcoinEthereumNews.com.
SOL price has increased by 6% over the last 7 days but is down 17% since the start of the month. Indicators flashing mixed signals have resulted in indecisiveness among SOL market speculators. Solana [SOL] price action over the weekend and this week has been characterized by a thwarted uptrend. TradingView data shows SOL/USDT’s 20-, 50-, and 100-day exponential moving averages (EMAs) have come into tight convergence. This indicated that the difference in momentum across various timeframes has diminished. Lack a clear trend direction as momentum rebuilds The Average Directional Index (ADX), used to quantify the strength of a trend in a market, has dropped to low levels on the SOL daily chart implying that the market no longer has a strong directional bias. A low ADX typically correlates with reduced market volatility and, in Solana’s case, may be an indication that the uptrend has waned and the market is transitioning from a trending phase to consolidation or range-bound activity. Source: TradingView TradingView data showed that the ADX for SOL/USDT has consistently dropped from 26 on 6th August to 19 at the time of writing. This reading is strikingly below the 20-mark threshold. It suggests Solana may be limited to less dramatic price movements in the near term. Momentum indicators point to uptrend continuation in the near term In a low ADX environment, range-bound or mean-reversion strategies become more relevant. On the daily chart, SOL/USDT has printed successive positive Moving Average Convergence Divergence (MACD) histograms for the past five days. Source: TradingView In addition to the positive histograms, the MACD line has recently crossed into positive territory though the signal line remains in negative territory. The MACD overall picture suggests that bullish momentum has been reasserting itself steadily. But the longer-term trend is still catching up. Source: TradingView Zooming in,…
Filed under: News - @ August 28, 2024 8:21 am